Another snafu in DOL’s plan to update fiduciary standard

Executives at retirement industry organizations were miffed after receiving a letter from the Labor Department this week, giving them until today to tell the agency whether they can provide data on IRAs.
The Insured Retirement Institute, The Financial Services Roundtable, the National Association of Insurance and Financial Advisors and the Financial Services Institute Inc. were among the groups that received the letter from the Labor Department, which was dated Feb. 10. The letter noted that the groups had until Feb. 17 to indicate if they would be able to provide the information. The DOL wants the data as it looks to revise the fiduciary standard for advisers who deal with retirement vehicles, including individual retirement accounts.
The problem? Some of the groups received the letter only yesterday, meaning they had one day to comply with the request.
Late Thursday, however, the DOL backed off. The department e-mailed the industry groups, informing them that it was pushing back the deadline to Feb. 24.
The kerfuffle is just the latest in a series of fits and starts that have marked the department’s attempt to update the fiduciary standard. The agency last year floated an expanded definition of “fiduciary” under the Employee Retirement Income Security Act of 1974. That revised version was pulled, however, following an outcry from industry groups. Many of those groups claimed that the revamped standard would force some of its members to stop offering advice on IRAs, 401(k)s and other retirement plans subject to ERISA.
Nevertheless, officials at the DOL have vowed to press ahead, promising to issue a revision of its earlier revision sometime this year.
“As the department moves forward with its re-proposal, it is important that we know which, if any, of the data elements enumerated in my December 15, 2011, letter you will be able to provide and when we can expect to receive these data,” Joseph S. Piacentini, director, office of policy and research at the DOL, wrote in the letter. “I am hereby requesting your organization’s response by February 17, 2012.”
Some of the industry groups — including the American Council of Life Insurers and IRI — were caught off guard by that deadline.
“Certainly, this is a priority for us, and we will do all we can to get them the available information by tomorrow to answer their detailed and lengthy questions,” said Danielle Holland, spokeswoman for IRI. “However, as you can understand, having just over a day to produce all of the relevant data could prove to be somewhat challenging.”
DOL spokesman Jason Surbey noted that the agency was asking only for what data the groups could provide by the deadline. “While our correspondence requested a response by Feb. 17, 2012, we did not set a deadline for delivery of the actual data,” he wrote in an e-mail. “Further, we have extended the period for a response to Feb. 24, 2012.”
NAIFA, the advocacy group for insurance agents, sent a response to the DOL yesterday, saying it would not be able to provide the requested data
“Because of the nature of the membership, we represent individuals who are not able to provide the level of data the DOL is looking for,” said Lillian Vogl, counsel, federal relations at NAIFA. “The data really belongs to the companies and the clients, not to the advisers.”